Manitoba Pension Commission - Legislation Review

February 27th, 2018

The Pension Commission of Manitoba reviews our Provincial pension legislation every 5 years.  It is currently undergoing that review with input from pension plan professionals and other stakeholders in the pension industry.

While there has been some concerns expressed in the media regarding how these proposed changes will impact the future of pension benefits for Defined Benefit Plans, like the Municipal Employees Pension Plan, we just wish to clarify that the Province is still in the consultation phase of their review process and most recommendations in the Consultation paper are to address challenges that the industry has been asking for solutions on for some time.  Examples of this include greater flexibility with funding solvency deficiencies, greater flexibility with the separation of assets as a result of a relationship breakdown, and unlocking of pension assets in the case of financial hardship.

There has also been a proposal to allow for the introduction of Target Benefit Plans, a form of Defined Benefit Pension Plan, which limits an employer’s responsibility to contribute to pension plans to what has been contractually agreed to (generally through collective bargaining).  This is not an ideal model for all Defined Benefit Pension Plans, however is being recommended to reduce the incentive for some plans to convert to a Defined Contribution basis.  It should be noted that even if the Target Benefit Plan design becomes available in Manitoba, it is not being proposed that all Defined Benefit Plans must convert to this new plan design – it would remain each plans option to do so or to remain unchanged from its current design.  In this regard, MEBP trustees are not looking to change the Plan structure.

On behalf of the MEBP trustees, a response to the Pension Commission Consultation Paper has been prepared, outlining agreement in some areas to the proposals set forth and reasons for disagreement with others.  In general, the trustees are in agreement with providing some flexibility to pension legislation where it is beneficial to the plan and members, but not where it could jeopardize the pension promise to plan members.

Further information regarding any changes to Manitoba’s pension legislation will be identified to Plan members as it becomes available.